CSR – An Opportunity for Lawyers to Do Good and Be Well

The legal profession is much maligned in the business community and in society in general, and many lawyers complain of deep dissatisfaction with their choice of career and the day-to-day tasks associated with their roles in the legal system.  Proactively participating in environmental and social responsibility initiatives, either as individual lawyer and as law firm team members or by assisting clients, is a real opportunity for attorneys to change their lives and the communities in which they practice in a positive and impactful manner.  Many attorneys entered law school with the goal of acquiring the tools necessary to help those who needed support from others and, in some small way, to “change the world”.  For those who may have lost their way, for whatever reason, or are looking for ways to do more, corporate social responsibility (CSR) is a welcome and promising platform and this post discusses the various roles that lawyers can play in CSR planning, governance, management and implementation.

While CSR is often described as “going beyond the law”, a good deal of the work relating to social and environmental responsibility involves understanding how to comply with existing laws and regulations and planning for and addressing the risks of misbehaviors in areas generally associated with CSR and sustainability such as human rights and child labor issues in the supply chain, discrimination in the workplace, health and safety issues, environmental practices, and cybersecurity and privacy.  As such, the legal department, particularly the general counsel, has a significant role to play in developing and implementing the CSR and sustainability initiatives of any organization.   The legal department is also a natural contributor to organizational efforts to comply with voluntary standards, some of which will inevitably become hard law, and an experience guide on questions of materiality that arise as organizations expand their disclosure and reporting activities to include social and environmental goals and performance.

Individual attorneys, in-house legal departments and law firms can be affected by CSR in several ways.  First of all, all attorneys, regardless of whether they work on their own or for an organization, are subject to various professional ethics codes with respect to the work that they perform on behalf of their clients and the role that they play in the justice system.  Second, lawyers may be requested by clients as suppliers of services to submit themselves to the client’s CSR policy.  For in-house lawyers this means formally acknowledging and agreeing to the code of conduct and other CSR-related policies of their employers.  Prospective candidates for law firm positions are increasingly asking firms about their own CSR policies (e.g., in areas such as diversity and work-life balance) and activities and those of the clients that have the most substantial economic impact on the firm.  Third, lawyers can receive requests from their clients for advice on development and implementation of CSR and overall compliance plans and, in fact, compliance is an area of CSR in which lawyers are already heavily involved on a day-to-day basis.  Fourth, lawyers are often asked to assist client in performing audits to verify compliance.  Finally, lawyers, either on their own or as part of a group (i.e., other lawyers from their in-house legal department or law firm or legal colleagues from a bar association), may engage in activities intended to have an environmental and/or social impact such as provide pro bono legal services to client otherwise unable to afford a lawyer who have claims based on a violation of their human rights or damage to health and/or property due to environmentally irresponsible actions of others.[1]

Even if a lawyer is not engaged directly in some sort of CSR-related activity, he or she needs to be aware of the role that environmental and social activists are playing in the marketplaces in which their clients are operating and be able to counsel their clients on the litigation and reputational risks associated with failing to adhere to CSR norms and practices.  Lawyers must be familiar with the impact that CSR is having on the type and magnitude of claims based on the negligence of their client, such as the willingness of judges and juries to impose substantial economic sanctions on defendants found to have caused injuries to people and damage to properties due to failure to take their environmental and/or social responsibilities seriously.  Transactional lawyers must be mindful of the impact that development projects and acquisitions may have on local communities and counsel their clients on the social aspects of consolidation of workforces and making changes to workplace practices and benefits.  Lawyers should also expect to be involved in corporate governance and counseling boards about the role that sustainability plays in their oversight responsibilities; monitoring the activities of supply chain partners; and crisis management in the event that a client, either recklessly or accidently, engages in activities that cause harmful environmental and/or social impact.  All of this flows from the growing belief that companies are more than just legal entities and are citizens of the world in which they operate with duties and responsibilities to others and vulnerability to being held financially and criminally accountable for poor citizenship.

Vernon described some of the ways that individual attorneys as well as entire groups within corporate legal departments may become involved in counseling on CSR matters and the manner and consequences of stakeholder engagement.  He noted that attorneys are often called upon to advise their clients on internal policies and procedures, external policies and procedures, supplier contracts, gover­nance, compliance, public relations and contractual obligations with various business partners and each of these are areas in which CSR issues and obligations may be relevant.  Examples may include consulting on the potential impact from a compliance perspective of adoption of a new human rights policy applicable to the company’s own facilities and the facilities of its supply chain partners around the world; advising on the compliance and transparency obligations that would come from the adoption of a corporate-wide wa­ter stewardship policy; and reviewing proposed sustainability reporting to be initiated as part of the company’s efforts to demonstrate more transparency.[2]

A June 2015 publication prepared under the auspices of the UN Global Compact included the following recommendations for general counsels with respect to their role in the corporate sustainability initiatives of their organizations[3]:

  • Embrace the breadth of the role: Reflect on key drivers of change; create “heat” map of drivers against corporate strategy; identify and assess gaps and trends; and develop “legal model” change plan based on corporate priorities
  • Prioritize sustainability: Mirror corporate emphasis on sustainability within strategic priorities for legal; regularize on your agenda; and commit financial and human resources to capacity-build within legal
  • Communicate expectations to third party advisers: Communicate to external advisers about your strategic priorities; reinforce your expectations about the support and engagement needed from them; have an open dialogue about strengths and weaknesses; and discuss specific changes in approach and team
  • Build internal credibility: Create legal SWOT (“strengths, weaknesses, opportunities and threats”) with business and sustainability experts; agree on areas of focus for legal with the business; agree on plan of engagement for legal with relevant constituencies’ operations; and formally reassess progress with business periodically to underscore engagement
  • Redefine career path for legal: Articulate that an increased focus on corporate sustainability is key to career development given underlying trends; and assess progress annually and communicate as part of core role
  • Establish KPIs and rewards: Tie sustainability KPIs to team taking a “broadened” role and engagement; agree objective and subjective elements with business and team; create financial and nonfinancial incentives;
  • Create integrated objectives with business units: Objectives for cross-functional teams should be integrated into annual performance assessment of legal team members
  • Drive change from the top: Proactively engage with C-Suite/Board on sustainability issues; communicate strategic importance of corporate sustainability with legal team
  • Peer-to-peer engagement: Discuss the drivers of change and broadened role with other GCs or “C-Suite” executives; discuss approaches to driving corporate sustainability from legal, including through the use of KPIs; capture and share best practices
  • Embed within legal strategy: Identify aspects of key sustainability issues where legal can engage; embed points of engagement on corporate sustainability within legal department strategy/objectives
  • Engage with third parties: Engage with NGOs to develop expertise and credibility; set the tone within legal that “balanced engagement” is a key corporate strategy; and encourage legal team to be part of stakeholder engagement strategy from earliest stages
  • Communicate initiatives and engagement regularly: Regularize reporting to GC on sustainability/engagement issues; communicate efforts/initiatives of legal team periodically; and use both formal and informal mechanisms to communicate
  • Build familiarity in legal team: Dedicate legal resources to corporate sustainability issues; regularize internal engagement on sustainability issues; focus on practical application of “traditional” legal skills; and engage in skills development and training
  • Build cross-functional teams: Embed legal expertise in key areas; encourage early and regularized engagement by legal team; elevate issues/developments across internal “silos”; and periodic “progress” reports to GC/legal team

For further discussion see Sustainability Governance and Management.

Notes

[1] Adapted from Corporate Social Responsibility and the Role of the Legal Profession: A Guide for European Lawyers (Council of Bars and Law Societies of Europe, June 2008).

[2] K. Vernon, “Corporate Social Responsibility: Stakeholder Engagement: Opportunity for Business to Thrive?”, Business Law Today (January 2015).

[3] Guide for General Counsel on Corporate Sustainability (UN Global Compact and Linklaters LLP, June 2015).  See also Corporate Social Responsibility and the Role of the Legal Profession: A Guide for European Lawyers (Council of Bars and Law Societies of Europe, June 2008).

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